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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (40293)	10/2/2003 12:31:30 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70956

Story Stocks® About This Page \| Printable Version \| Archive \| Yesterday \| Ticker Search: -------------------------------------------------------------------------------- Updated: 02-Oct-03 Quotes at time of story, top stories today: UTSI 12:02 \| MLNM 10:45 \| Ratings Briefing: ODP & SPLS 10:22 \| The Technical Brew 09:58 \| The Technical Take 09:17 \| Page One - Ahead of the Open : 08:44 12:02 ET UTStarcom (UTSI) 35.86 +2.95: Developing markets have much lower phone line penetrations than developed markets, generally less than 10 per 100 inhabitants vs. 60 per 100. The ability to rapidly and cost effectively deploy access is critical to economic and social development. UTSI's wireless, wireline and network access equipment is based on a flexible network architecture that allow service providers to rapidly build out their networks based on existing infrastructure and offer voice, data and internet access. What makes UTSI's PAS (Personal Access System) technology appealing is that it allows for migration from wireline to wireless and integrates with broadband technologies and 3G. For service providers, this means they can focus on rapid deployment and subscriber growth, and realize a faster return on investment compared to laying down copper and fiber, which is both costly and time consuming. For consumers, this translates into services that are generally affordable and consistent with the per capita income of the developing market. UTStarcom raised Q3 guidance last night. Revenues went from $495-505MM to $570-580MM; EPS from $0.42-$0.43 to $0.44-$0.45. Management expects gross margins to be in the 32% range vs. the 34% guidance, given during the Q2 conference call, as handset sales account for an increasing percentage of overall revenues. Full year '03 revenues are expected to top $1.9B, up from previous guidance of $1.8B; meanwhile, EPS is anticipated to be $1.59 vs. previous guidance of $1.55. Separately, we note that UTSI was identified on our Tech Stocks page last night as a compelling investment idea. We think UTSI, with deployments in China, Vietnam, Thailand and Africa, is an attractive play on both telecom equipment and developing markets. With a greater than 60% share of the fast growing China market (80% of sales), and a toehold in Vietnam, another rapidly developing market with a population of approximately 80MM people, half below the age of 30, UTSI is well positioned to continue posting double digit top-line growth over the next few quarters. At $35, UTSI is trading at 1.9x '03E sales and 1.7x '04E sales; 22x '03E earnings and 18x '04E earnings. This compares favorably against leading industry comps which trade at 1.9x '03 sales and 1.8x '04E sales; 94x '03E earnings and 26x '04E earnings.--Ping Yu, Briefing.com